Indonesia's Export Value Recorded The Highest Record In History, Airlangga: Indonesia's Economy Is Recovering

Coordinating Minister for the Economy, Airlangga Hartarto. (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - Indonesia's trade balance in August 2021 showed an improved performance compared to last month. According to the Central Bureau of Statistics released on Wednesday, September 15, Indonesia's trade value in the August 2021 period recorded a surplus of 4.74 billion US dollars, continuing the surplus trend since May 2020 or a surplus for 16 consecutive months.

The surplus value is even the highest record since December 2006 of 4.64 billion US dollars. The impressive surplus performance was supported by an increase in Indonesia's exports which accelerated in August 2021 to reach US$21.42 billion, a double digit increase of 20.95 percent (mtm) or 64.10 percent (yoy).

The export value was also recorded as a new record high for Indonesia's exports, breaking the all-time high that was previously recorded in August 2011 of 18.60 billion US dollars.

"This achievement indicates that Indonesia's economic recovery continues in line with the recovery in global demand. This is indicated by the continued increase in export volume and prices for Indonesia's mainstay commodities such as coal by 11.04 percent (mtm) and CPO by 6.85 percent (mtm), "said Coordinating Minister for Economic Affairs Airlangga Hartarto.

The increase in Indonesian exports also confirmed the improvement in Indonesia's Manufacturing Purchasing Managers Index (PMI) in August 2021, which increased to 43.7 from the previous level of 40.1 in July 2021. Indonesia's PMI level is also better than several countries in ASEAN, such as Myanmar ( 36.5), Vietnam (40.2), and Malaysia (43.4).

The largest increase in Indonesia's exports in August 2021 occurred in commodities of animal/vegetable fats and oils (HS 15) of 1,544.8 million US dollars, mineral fuels (HS 27) of 573.2 million US dollars, and metal ores (HS 26). amounted to 213.1 million US dollars. Meanwhile, non-oil and gas export destinations that experienced the largest increase compared to the previous month included China (1,212.2 million US dollars), India (759.1 million US dollars), and Japan (453.2 million US dollars).

In line with the increase in exports, Indonesia's import side in August 2021 reached 16.68 billion US dollars, an increase of 10.35 percent (mtm) or 55.26 percent (yoy). Community mobility which began to increase along with the easing of the PPKM is an indication of the cause of the increase.

"The increase in imports in August 2021 was supported by an increase in imports of capital goods by 34.56 percent (yoy) and raw/auxiliary materials by 59.59 percent (yoy) which shows an increase in industrial production capacity in Indonesia and the Indonesian economy continues to recover," said Coordinating Minister Airlangga.

Indonesia's import structure in August 2021 was dominated by imports of raw/auxiliary materials which reached 74.20 percent of total imports, followed by capital goods reaching 14.47 percent, and consumer goods at 11.33%. This structure indicates a productive Indonesian economy through the creation of greater added value, both for domestic needs and for re-export.

Encouragement for Small and Medium Industry (IKM) Exports

"The positive performance of Indonesia's exports cannot be separated from the role of various parties, including the contribution of IKM players who were able to survive in the midst of the turmoil of the COVID-19 pandemic," said Coordinating Minister Airlangga.

This is evidenced by the increase in two export commodities based on the IKM sector, namely exports of Timber and Wood Goods (HS 44) which grew 18.31 percent (yoy) and Furniture (HS 94) which grew to 30.12% (YoY). yoy) during the period January to July 2021. These two commodities are even included in the 20 main contributors to Indonesia's exports throughout 2021.

Exports of commodities in HS 44 reached 2.55 billion US dollars, ranked 12th with a share of 2.12 percent of total exports and HS 94 reached 1.63 billion US dollars, ranked 19th with a share of 1.36 percent of the total export.

The export contribution of HS 44 and HS 94 which in fact is based on IKM needs to be appreciated. To maintain the sustainability of the positive export performance of these two commodities, several key factors need to be continuously observed, including: (i) Availability of adequate containers and stability of affordable freight costs, (ii) Ease of processing the Timber Legality Verification System (SVLK) , (iii) Maintaining price stability and the availability of wood supply to industry, (iv) Smooth integrated immigration permits for inspectors for overseas buyers, (v) Improving product quality and human resource expertise, (vi) Facilitating production technology and infrastructure, (vii ) Increasing market access through facilitation of exhibitions and promotions, and (viii) Ease of access to finance for expansion.

"Efforts to encourage exports of IKM commodities will not only be carried out on these two commodities. The government and all stakeholders continue to strive to develop various relevant programs and incentives for all export-based IKM commodities. Indonesia's exports as a whole," concluded Coordinating Minister Airlangga.